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Chief Executive Officer’s review:
Taking action today, building for tomorrow

Ben Van Beurden, Chief Executive Officer (photo)
Ben van Beurden, Chief Executive Officer

Like many others, I have been appalled by Russia’s invasion of Ukraine, an act of aggression that shocked the world. It has inflicted much suffering, and threatened the security of a continent.

Our first priority, as always, was the safety of our people. We employ around 1,500 staff and contractors in Ukraine. We have been doing everything we can to try to ensure their safety and well-being.

We also took decisive action in support of global economic measures against Russia. We announced our intention to exit joint ventures with Gazprom, a majority Russian-government-owned business, and related entities. This included the Sakhalin-2 liquefied natural gas (LNG) facility, Salym Petroleum Development and the Gydan energy venture. We also intend to end our involvement in the Nord Stream 2 pipeline project.

At the end of 2021, Shell had around $3 billion in non-current assets in these ventures in Russia. We expect our actions will have an impact on the book value of Shell’s Russia assets and lead to impairments.

We also decided to withdraw from involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and LNG, in a phased manner, in line with government guidance. We will shut our service stations, aviation fuels and lubricants operations in Russia.

We will go ahead with these steps, regardless of their financial implications, while doing everything we can to support our staff in Russia.

Difficult times bring out the best in people. I was moved by how in Shell, Russian and Ukrainian colleagues worked together to respond to events. Shell staff in neighbouring countries stepped up to the task of helping refugees from war.

As a business, Shell too will seek to help in the relief effort. In discussion with governments around the world, we will also work through the detailed business implications, including the importance of secure energy supplies to Europe and other markets, in compliance with relevant sanctions.

Building for the future

While so much has happened in recent weeks to increase the challenges our business faces, we must stay on track to ensure continued success. Our Powering Progress strategy and financial framework remain unchanged.

In 2021, we continued to build for the future. We moved ahead at pace with the transformation of our refining business into energy and chemicals parks that can meet our customers’ growing demand for low-carbon energy.

We made progress in developing our interests in electric vehicle charging, biofuels, and carbon capture and storage (CCS); in hydrogen, wind and solar power.

These are businesses of the low-carbon energy future. The world will need them if it is to tackle climate change. They are also businesses of enormous potential. I believe that, as they mature, they could be as profitable for Shell as our oil and gas operations are now.

Strong results

In 2021, we delivered strong financial results. Our income was $20.6 billion in 2021, compared with a loss of $21.5 billion the previous year. Shell’s cash flow from operations went from $34.1 billion in 2020 to $45.1 billion in 2021. Our distributions to shareholders were $9.1 billion in 2021, the same as in 2020. We expect shareholder distributions to increase significantly in 2022.

Shell’s net debt reduced from $75.4 billion in 2020 to $52.6 billion at the end of 2021. This brought us below the $65 billion milestone, at which point we increased total shareholder distributions to 20-30% of cash flow from operations.

We announced a share buyback programme of $8.5 billion for the first half of 2022. This will include $5.5 billion from the sale of our shales business in the US Permian Basin.

We expect to increase our dividend by around 4% to 25 US cents a share for the first quarter of 2022.


In 2021, sadly, six of our contractor colleagues and a police officer were killed in an appalling attack in Nigeria. In Pakistan, a lorry driver died in a refuelling accident at a dealer-operated retail site. A contractor died in an accident at an Indonesian retail site.

I am determined that we learn from these terrible incidents. We must do everything possible to ensure that anyone who works for Shell goes home safe and well.

Investing to meet demand today and in the future

Eletrolyser producing hydrogen from renewables at the Energy and Chemicals Park Rheinland (photo)
Electrolyser producing hydrogen from renewables at the Energy and Chemicals Park Rheinland
Woman charging her electric vehicle (photo)
Providing electric vehicle charge points
Planning the Whale deep water development (photo)
Planning the Whale deep-water development
Generating offshore wind power (photo)
Generating offshore wind power

Rising to the challenges

The rapid recovery of energy demand in 2021 was very welcome, but a lag in supply led to high oil and gas prices and unfortunately, in some parts of the world, a cost-of-living crisis for consumers as energy prices spiked. Growing tensions as Russia prepared to invade Ukraine added to the rise in prices.

People and businesses must have affordable energy bills. Shell can help to bolster supplies by delivering LNG to countries experiencing shortages.

Shell must also play its part in helping to tackle the world’s biggest challenge: climate change. The COP26 summit in Glasgow, Scotland, made some progress. Agreement on how Article 6 of the 2015 Paris Agreement will work in practice, for example, should stimulate cross-border carbon trading – which could prove important in getting the world to net zero.

When we launched our Powering Progress strategy in February 2021, we set short- and medium-term targets to reduce carbon emissions that were ambitious, but realistic. We also reaffirmed our long-term target to become a net-zero emissions energy business by 2050, in step with society’s progress towards meeting the climate goals of the Paris Agreement.

In May 2021, the District Court in The Hague ruled that by 2030 Shell must reduce its worldwide net-carbon emissions by 45% by 2030, compared with 2019 levels. We were disappointed by this ruling, but we decided to rise to the challenge by accelerating our strategy to reduce carbon emissions. We set a new target of cutting the absolute emissions from our operations and the energy we buy to run them by 50% by 2030, compared with 2016 levels on a net basis.

At the same time, we are appealing against the ruling. It effectively holds Shell, a single company, accountable for a global challenge – reducing consumer demand for carbon-based fuels. What is really needed is action by all: governments, business, customers and wider society.

Companies like Shell, with our global scale, financial muscle and technological know-how, are critical to getting things done and helping to make the energy transition a reality. Collaborative action is crucial. For example, in July 2021, we signed an agreement with Deutsche Telekom. Shell will supply renewable energy and Deutsche Telekom engineers will install more than 10,000 electric vehicle chargers in Germany.

The transformation of our refineries into energy and chemicals parks opens up many possibilities. We are building an 820,000-tonnes-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam, in the Netherlands. And we have started producing hydrogen from renewables at the Energy and Chemicals Park Rheinland, in Germany.

Simpler, faster

Our company-wide reorganisation has made us more streamlined. Adopting a single line of shares and moving our tax residence to the UK will make it quicker and easier to manage our portfolio in the energy transition. We can also buy back shares more quickly, speeding up distributions to investors.

We will, though, remain a major presence in the Netherlands. We are proud of Shell’s Anglo-Dutch heritage. Shell has the agility, and our integrated business model gives us the financial muscle. Cash flows from our Upstream operations enable us to deliver strong shareholder returns and invest in low-carbon opportunities. Upstream also provides oil and gas that the world will need for years to come.

So while we invest for the future, we must continue to invest to meet today’s energy demand. In 2021, we strengthened our Upstream position in core regions. We decided to invest in the Whale development in the US Gulf of Mexico. As part of the Libra consortium, we chose to invest in a fourth floating production, storage and offloading (FPSO) vessel in the Mero field, off the Brazilian coast.

If 2021 was a year of historic change for Shell, it was also a year of great progress. One that has set us up for success as we seize the opportunities of the energy transition.

Ben van Beurden
Chief Executive Officer

carbon capture and storage
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